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Should you refinance your mortgage?

Published On: Jun 20 2014 11:22:45 AM CDT
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iStockPhoto / fotek

Refinancing can be a good option for some homeowners, especially if their interest rate is higher than the current rate. Take a look at some reasons why you might want to consider refinancing your mortgage.

 

Lower rate: Getting a lower rate on your mortgage will help you save money on your monthly mortgage bill. Some homeowners might qualify for programs that will help with the closing cost associated with refinancing. Programs can also help homeowners who are underwater on their mortgage due to lower home prices.

 

If you have an ARM: Homeowners who originally took out an Adjustable-Rate Mortgage are now taking advantage of lower rates and refinancing to take out a fixed-rate mortgage.

 

To consolidate debt: Some homeowners who need cash to pay off other debts have done a cash-out refinance. This was more popular when the housing marketing was booming and homeowners were making more money on their homes, according to Bank Rate.

 

Life changes: For homeowners who are going through significant life changes, like a divorce, refinancing to lower rates can help make monthly payments more manageable. It will also remove the former spouse from the mortgage.

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